Capture the rhythm of 'leading rotation' and arbitrage in the strength switch between BTC and ETH
Pain Point Focus: Do you feel that when BTC rises, ETH remains still, and when ETH finally takes off, BTC starts to consolidate? This 'seesaw' effect does exist. Cross-asset hedging does not predict overall rises and falls, but focuses on the rotational patterns between different leading assets.
Core Insight: Beta strategy and rotation capture
Strategy Principle: Capture the 'Beta' difference
Beta value: Measures the volatility of an asset relative to the market (usually referring to BTC). Beta > 1 indicates greater volatility than BTC (more pronounced fluctuations), while Beta < 1 is more stable.
ETH is generally considered to be an asset with a Beta value higher than BTC. In a bull market, ETH's gains may exceed those of BTC; in a bear market or correction, losses may also be deeper.
Strategy operation: When expecting the market to rise, allocate more high Beta assets (such as ETH), and allocate less or short low Beta assets (such as BTC); conversely when expecting the market to fall.
Practical case: The switch between BTC dominance and ALT season
Scenario one (early bull market): Usually starts with BTC initiating the rise, at which point BTC is strong and ETH is relatively weak. The strategy can be "long BTC, short ETH" to earn profits from the leading rise.
Scenario two (Altcoin season): When BTC breaks through key resistance levels and consolidates, funds will overflow to ETH and other mainstream coins. At this point, ETH is strong while BTC is relatively weak. The strategy can be adjusted to "long ETH, short BTC" to capture the benefits of altcoin season.
Key indicator: Observe the trend of BTC dominance (the proportion of Bitcoin's market value).
Risks and key points
This kind of rotation does not happen every time, and there is a risk of misjudgment.
It is necessary to strictly control positions and stop losses to prevent the strategy from failing due to the specific risks of a single cryptocurrency (such as issues arising from ETH upgrades).
Personal opinion:
"Cross-species hedging is the first step towards 'macro trading'. It requires you to not only look at K-lines but also understand capital flows and market cycles. My personal experience is that when everyone starts discussing a certain ALTcoin, it is often a signal that the rotation is nearing its end. Staying calm and preparing in advance is the key to success."
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